[Federal Register Volume 66, Number 134 (Thursday, July 12, 2001)]
[Rules and Regulations]
[Pages 36683-36694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17466]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR parts 515, 538, 550, and 560
Exports of Agricultural Products, Medicines, and Medical Devices
to Cuba, Sudan, Libya, and Iran; Cuba Travel-Related Transactions
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Interim rule with request for comments; amendments.
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SUMMARY: The Office of Foreign Assets Control of the U.S. Department of
the Treasury is issuing and amending regulations to implement the Trade
Sanctions Reform and Export Enhancement Act of 2000, Title IX of Public
Law 106-387 (October 28, 2000). These regulations amend the licensing
[[Page 36684]]
provisions of the Cuban Assets Control Regulations, the Sudanese
Sanctions Regulations, the Libyan Sanctions Regulations, and the
Iranian Transactions Regulations, 31 CFR parts 515, 538, 550, and 560,
respectively, as they relate to the exportation and reexportation from
the U.S. or by U.S. persons of agricultural commodities, medicine, or
medical devices to Cuba, Sudan, Libya, and Iran. These regulations also
amend the Cuban Assets Control Regulations with respect to Cuba travel-
related transactions.
DATES: Effective Date: July 26, 2001.
Comments: Written comments must be received no later than September
10, 2001. Comments should be sent to David W. Mills, Chief, Policy
Planning and Program Management Division, Room 2176 Main Treasury
Annex, 1500 Pennsylvania Ave. N.W., Washington, DC 20220 or via OFAC's
website (http://www.treas.gov/ofac).
FOR FURTHER INFORMATION CONTACT: Dennis P. Wood, Chief of Compliance
Programs, tel.: 202/622-2490, Steven I. Pinter, Acting Chief of
Licensing, tel.: 202/622-2480, or Barbara C. Hammerle, Acting Chief
Counsel, tel.: 202/622-2410, Office of Foreign Assets Control,
Department of the Treasury, Washington, DC 20220.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for
disk or paper copies. This file is available for downloading without
charge in ASCII and Adobe Acrobat7 readable (*.PDF) formats. For
Internet access, the address for use with the World Wide Web (Home
Page), Telnet, or FTP protocol is: fedbbs.access.gpo.gov. This document
and additional information concerning the programs of the Office of
Foreign Assets Control are available for downloading from the Office's
Internet Home Page: http://www.treas.gov/ofac, or in fax form through
the Office's 24-hour fax-on-demand service: call 202/622-0077 using a
fax machine, fax modem, or (within the United States) a touch-tone
telephone.
Background
The Trade Sanctions Reform and Export Enhancement Act of 2000,
Title IX of Public Law 106-387 (October 28, 2000) (the ``TSRA''),
provides that the President shall terminate any unilateral agricultural
sanction or unilateral medical sanction in effect as of the date of
enactment of the TSRA. The TSRA does not direct the termination of any
unilateral agricultural sanction or unilateral medical sanction that
prohibits, restricts, or conditions the provision or use of any
agricultural commodity, medicine, or medical device that is controlled
on the United States Munitions List, controlled on any control list
established by the Export Administration Act of 1979 or any successor
statute, or used to facilitate the development or production of
chemical or biological weapons or weapons of mass destruction.
Exporters should consult the Department of Commerce, Bureau of Export
Administration (``BXA''), to determine whether a particular item is
controlled under specific Export Commodity Control Number (``ECCN'') on
the Commerce Control List in the Export Administration Regulations, 15
CFR part 774, supplement no. 1 (the ``CCL'').
Section 906 of the TSRA further requires that the export of
agricultural commodities, medicine, or medical devices to Cuba or to
the government of a country that has been determined by the Secretary
of State, under Section 620A of the Foreign Assistance Act of 1961 (22
U.S.C. 2371), section 6(j)(1) of the Export Administration Act of 1979
(50 U.S.C. app. 2405(j)(1)), or section 40(d) of the Arms Export
Control Act (22 U.S.C. 2780(d)), to have provided support repeatedly
for acts of international terrorism, or to any other entity in such a
country, shall only be made pursuant to one-year licenses issued by the
United States Government. The governments of Cuba, Sudan, Libya, and
Iran have been designated as supporting international terrorism
pursuant to section 6(j) of the Export Administration Act of 1979.
These regulations amend the Cuban Assets Control Regulations, 31
CFR part 515 (``CACR''), the Sudanese Sanctions Regulations, 31 CFR
part 538 (the ``SSR''), the Libyan Sanctions Regulations, 31 CFR part
550 (the ``LSR''), and the Iranian Transactions Regulations, 31 CFR
part 560 (the ``ITR''), to implement the TSRA as required. The
Department of Treasury's Office of Foreign Assets Control (``OFAC'')
has endeavored to implement the TSRA in a way that is consistent with
both the statutory language and the intent of its drafters and in a
manner that also provides exporters with an efficient and expedited
process for engaging in authorized exports of agricultural commodities,
medicine, and medical devices. Following this approach, OFAC is
applying the licensing procedures required by section 906 of the TSRA
to all exports and reexports of agricultural commodities, medicine, and
medical devices to Sudan, Libya, and Iran that are within the current
scope of OFAC's licensing jurisdiction. Similarly, OFAC is applying
this licensing procedure to cover exports to the governments of Sudan,
Libya, and Iran, any entities in these countries, and individuals in
these countries, as well as to persons in third countries purchasing
specifically for resale to any of the foregoing.
Cuban Assets Control Regulations. This rule implements the TSRA
with respect to the Cuban Assets Control Regulations, 31 CFR part 515
(the ``CACR''), in the following ways:
With respect to exports from the United States to Cuba,
Sec. 515.533 of the CACR already provides a general license for
transactions incident to exportations that are licensed or otherwise
authorized by the Department of Commerce. As was the case prior to
enactment of the TSRA, exporters seeking to export items from the
United States to Cuba should seek authorization from the Commerce
Department, which is also amending its regulations to implement the
TSRA.
OFAC is amending Sec. 515.533 to clarify that reexports of U.S.-
origin items by persons subject to U.S. jurisdiction are also covered
by this general license. Thus, overseas persons subject to U.S.
jurisdiction that wish to reexport U.S.-origin items to Cuba are
authorized to do so provided the reexport is licensed or otherwise
authorized by the Commerce Department.
OFAC is also amending Sec. 515.533 to clarify the general
restrictions on financing sales of licensed items to Cuba and to
implement the special financing restrictions with respect to licensed
agricultural sales to Cuba contained in Section 908(b) of the TSRA. The
new language slightly expands the payment and financing terms that may
be used in agricultural sales to Cuba from those that previously
existed.
Although Sec. 515.207 of the CACR prohibits the entry into U.S.
ports by vessels engaged in Cuban commerce, Sec. 515.550 already
provides a waiver for those vessels engaged in trade with Cuba that is
licensed or otherwise exempt. Thus, vessels carrying exports or
reexports of agricultural commodities, medicine, or medical supplies
that have been licensed or otherwise authorized by the Commerce
Department will be permitted to enter U.S. ports, provided they have
not carried unlicensed and non-exempt cargo or persons to or from Cuba
and provided they are not currently carrying unauthorized goods in
which Cuba or a
[[Page 36685]]
Cuban national has an interest. A short note referencing this waiver is
added to the end of Sec. 515.207, which contains the prohibition on
vessel entry.
Section 1706(a)(1) of the Cuban Democracy Act of 1992, 106 Stat.
2575, prohibits the issuance of licenses authorizing U.S.-owned or
controlled foreign firms to engage in transactions related to the
exportation to Cuba of commodities produced outside of the United
States. OFAC is amending the Note to Sec. 515.559 to make clear that
U.S.-owned or controlled foreign firms may, however, be authorized to
engage in the reexport of U.S.-origin items to Cuba pursuant to
Sec. 515.533. Otherwise, the provisions of Sec. 515.559 remain
unchanged.
With respect to section 910(a) of the TSRA, which authorizes Cuba
travel-related transactions regarding the commercial sale of
agricultural commodities, Sec. 515.533(e) of the CACR already states
that specific licenses may be issued on a case-by-case basis
authorizing Cuba travel-related transactions directly incident to
marketing, sales negotiation, accompanied delivery, and servicing of
exports and reexports that appear consistent with the export and
reexport licensing policy of the Commerce Department. A prospective
exporter does not need to obtain a license from the Commerce Department
before applying for such a travel license provided that the proposed
exports or reexports clearly fit within current Commerce licensing
policy. Section 515.560(b) of the CACR is amended to implement section
910(b) of the TSRA.
Sudanese Sanctions Regulations (``SSR''), Libyan Sanctions
Regulations (``LSR''), Iranian Transaction Regulations (``ITR''). With
respect to the SSR, LSR, and ITR, this rule is intended to establish an
expedited process for the issuance of the one-year license required by
section 906 of the TSRA. This rule also is intended to clarify the
agricultural commodities, medical devices, and medicines covered by the
new licensing provisions in these regulations. The Department of
Treasury's Office of Foreign Assets Control (``OFAC'') will put in
place expedited procedures to respond to requests for licenses to
export agricultural commodities, medicine, and medical devices to
Sudan, Libya, and Iran. Exporters of all fertilizers, live horses,
western red cedar, and medical devices require commodity classification
from the Department of Commerce, Bureau of Export Administration
(``BXA'') certifying that the product is EAR 99 included with the
exporter's license request to OFAC. See, 15 CFR 748.3 for instructions
for submitting commodity classifications. However, BXA will publish on
its website at www.bxa.doc.gov/Regulations/Trade Sanctions ReformExport
EnhancementAct.html a list of medical supplies, such as syringes,
bandages, gauze and similar items, that do not require BXA commodity
classification prior to submitting a license application to OFAC. When
submitting a license request to OFAC under its expedited review
procedures, exporters must indicate to OFAC that their medical supply
is on the BXA medical supply list on BXA's website. Otherwise,
exporters must provide OFAC with a copy of the BXA commodity
classification for those medical devices that BXA has classified as
EAR99. BXA's website will also include a list of medicines that are not
EAR 99 and, therefore, not eligible for exportation under these rules.
The expedited process will include, when appropriate, referral of
the one-year license request to other government agencies for guidance
in evaluating the request. If no government agency raises an objection
to or concern with the application within nine business days from the
date of any such referral, OFAC will issue the one-year license,
provided that the request otherwise meets the requirements set forth in
this rule. If any government agency raises an objection to the request
within nine business days from the date of referral, OFAC will deny the
request for the one-year license. If any government agency raises a
concern short of an objection with the request within nine business
days from the date of referral, OFAC will delay its response to the
license request for no more than thirty additional days to allow for
further review of the request.
The TSRA defines agricultural commodities by reference to the
meaning given to that term in section 102 of the Agricultural Trade Act
of 1978 (7 U.S.C. 5602). This definition includes food commodities,
feed, fish, shellfish and fish products, beer, wine and spirits, soft
drinks, livestock, fiber, including cotton, wool, and other fibers,
tobacco and tobacco products, wood and wood products (including lumber
and utility poles), seeds, and reproductive materials such as
fertilized eggs, embryos, and semen. It also includes certain
fertilizers and organic fertilizers that are not otherwise controlled.
The term agricultural commodities does not include furniture made from
wood, clothing manufactured from plant or animal materials,
agricultural equipment (whether hand tools or motorized equipment),
pesticides, insecticides, herbicides, or cosmetics (unless derived
entirely from plant materials). Exporters may consult the Department of
Agriculture website at http://www.fas.usda.gov for assistance in
determining whether a particular item meets the definition of
agricultural commodities under the Agricultural Trade Act. Although the
definition of agricultural commodities under the TSRA does not include
vitamins and minerals, food additives or supplements, or bottled
drinking water, OFAC will include such items in the definition of
agricultural commodities for the purposes of this rule. An Official
Commodity Classification of EAR 99 obtained from BXA is required to be
submitted with the exporter's request to OFAC for a one-year license to
export to Sudan, Libya, or Iran fertilizers, live horses, or western
red cedar. An Official Commodity Classification from BXA is not
required to be submitted with the exporter's request for a one-year
license to export to Sudan, Libya, or Iran any other agricultural
commodity. See, 15 CFR 745.3 for instructions for obtaining an Official
Commodity Classification of EAR 99 from BXA.
The TSRA defines the terms medicine and medical device by adopting
the definitions of drug and device set forth in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). These definitions
include prescription medicines and over-the-counter medicines for
humans and animals that are classified as EAR 99. They also include
medical supplies, instruments, equipment, and equipped ambulances that
are so classified. They do not include general-purpose furniture and
equipment (such as desks, tables, lamps, and office computers) used in
medical offices and waiting rooms. Exporters may consult with the Food
and Drug Administration for assistance in determining whether a
particular item meets the definition of drug or device under the
Federal Food, Drug, and Cosmetic Act. Although most medicines and
medical devices are classified under the Export Administration
Regulations, 15 CFR part 774, as EAR 99, certain vaccines, biological
and chemical products, medical devices and parts for such devices are
listed on the CCL and are not eligible for export under this rule.
Exporters must have an Official Commodity Classification of EAR 99 from
BXA for all medical devices (including supplies) prior to submitting a
license request to OFAC, unless the item is specifically listed on
BXA's website at www.bxa.doc.gov/Regulations/TradeSanctionsReform
[[Page 36686]]
ExportEnhancementAct. This list identifies those medical supplies, such
as syringes, bandages, gauze and similar items, that do not require BXA
classification prior to submitting a license application to OFAC. When
submitting a license request to OFAC under its expedited review
procedures, exporters must indicate to OFAC that their medical supply
is listed on the BXA medical supply list on BXA's website. Otherwise,
exporters must provide OFAC with a copy of the BXA Official Commodity
Classification of EAR 99 for those medical devices not listed on the
BXA website. See, 15 CFR 745.3 for instructions for obtaining Official
Commodity Classification of EAR 99 from BXA.
In addition, BXA has identified on its website a list of medicines
that are on the CCL and not eligible for OFAC's expedited review
procedures. When submitting a license application to OFAC under its
expedited review procedures, exporters must indicate to OFAC that their
medicine is not on the BXA medicine list on BXA's website, in other
words, that it is classified as EAR 99. If exporters are unsure of
whether their medicine is on the CCL, they should seek an Official
Commodity Classification from BXA confirming that their medicine is
classified as EAR99 prior to submitting a license request to OFAC under
its expedited review procedures. See, 15 CFR 745.3 for instructions for
obtaining Official Commodity Classification of EAR 99 from BXA.
Sections 538.523, 550.569, and 560.530 set forth procedures and
requirements for requesting and obtaining these one-year licenses.
Incomplete requests will be returned to the requestor without action
and without prejudice.
These amendments to the SSR, LSR, and ITR also grant by general
license the authority for sellers to respond to public tenders on an
executory basis, negotiate and sign executory contracts, and make
necessary shipping and financing arrangements, not otherwise
specifically prohibited by Chapter V of 31 CFR, for the exportation to
Libya and the exportation or reexportation to Sudan and Iran of
agricultural commodities, medicine, and medical devices. Before the
actual exportation to Libya or exportation or reexportation to Sudan or
Iran takes place, prospective exporters must obtain a one-year license
issued by the Department of the Treasury upon a determination that such
exports are covered by the TSRA and are not exports to any entity
within Sudan, Libya, or Iran promoting international terrorism.
Specific licenses issued prior to the effective date of this rule
authorizing the performance of executory contracts for the sale of
agricultural commodities, medicine, or medical equipment shall remain
in effect until the expiration date specified in the license or the
first anniversary of the effective date of this rule, whichever comes
first. However, after the effective date of this rule, new contracts
for the exportation of agricultural commodities, medicine, or medical
devices may be entered into only pursuant to the terms of, and as
authorized by, this new rule.
Specific licenses issued prior to the effective date of this rule
authorizing the sale and exportation or reexportation of bulk
agricultural commodities listed in Appendix A to 31 CFR parts 538 and
550 and Appendix B to 31 CFR part 560 shall remain in effect solely to
permit completion of performance of contracts already entered into
prior to the effective date of this rule pursuant to the license. As of
the effective date of this rule, new contracts for the exportation of
bulk agricultural commodities may be entered into only pursuant to the
terms of, and as authorized by, this new rule.
Nothing in this rule, however, affects prohibitions on the
exportation of any agricultural commodity, medicine, or medical device
listed on the CCL. Moreover, nothing in this rule affects prohibitions
on the sale or supply of U.S. equipment, technology, or software used
to manufacture agricultural commodities, medicine, or medical devices,
such as technology to design or produce biotechnological items or
medical devices. This rule does not affect U.S. nonproliferation export
controls, including end-user and end-use controls maintained under the
Enhanced Proliferation Control Initiative.
This rule amends the SSR, LSR, and ITR in the following ways:
The amendments to Secs. 538.523, 550.569, and 560.530 of these
regulations implement section 906 of the Act by amending current
sanctions against Sudan, Libya, and Iran to require that all exports of
covered agricultural products, medicine, and medical devices to the
governments of these countries or any entities in these countries be
authorized by one-year licenses issued by the Department of the
Treasury. These one-year licenses will authorize the exporter to engage
in the exportation or reexportation of the licensed products for up to
one year from the date of signing of any contract that is entered into
during the one-year period of the license.
The amendments to Secs. 538.523, 550.569, and 560.530 of these
regulations further implement section 906 of the Act by providing
exporters a general license to engage in certain transactions relating
to the sale and exportation of covered items to Sudan, Libya, or Iran
prior to obtaining the one-year license, such as responding to public
tenders on an executory basis, negotiating and signing executory
contracts or other agreements capable of acceptance, making shipping
arrangements, obtaining insurance, and arranging financing, to the
extent not otherwise prohibited by Chapter V of 31 CFR. The one-year
licenses will also authorize the performance of executory contracts
entered into pursuant to the general license. The amendments specify
that any executory contracts entered into prior to obtaining the one-
year license will be deemed to have been entered into on the date the
one-year license is issued for the purpose of determining the beginning
of the 12-month period during which exports may be shipped.
The amendments to Secs. 538.523, 550.569, and 560.530 of these
regulations also implement section 906 of the Act by providing
procedures for requesting, and for the issuance of, the one-year
licenses.
Sections 538.526, 550.572, and 560.533 are amended to extend the
general license for U.S. persons to broker sales of bulk agricultural
commodities by U.S. persons to include the provision of brokerage
services on behalf of U.S. persons for sales of all agricultural
commodities, medicines, and medical devices as defined by
Secs. 538.523, 550.569, and 560.530.
Clarifying amendments are made to Secs. 538.205, 538.211, 538.405,
550.306, 550.318, 550.405, and 560.405.
Because the Regulations involve a foreign affairs function, the
provisions of Executive Order 12866 and the Administrative Procedure
Act (5 U.S.C. 553) (the ``APA'') requiring notice of proposed
rulemaking, opportunity for public participation, and delay in
effective date, are inapplicable. However, because of the importance of
the issues raised by these regulations, this rule is issued in interim
form and comments will be considered in the development of final
regulations. Accordingly, the Department encourages interested persons
who wish to comment to do so at the earliest possible time to permit
the fullest consideration of their views.
The period for submission of comments will close September 10,
2001. The Department will consider all comments received before the
close of the comment period in developing final regulations. Comments
received after
[[Page 36687]]
the end of the comment period will be considered if possible, but their
consideration cannot be assured. The Department will not accept public
comments accompanied by a request that a part or all of the submission
be treated confidentially because of its business proprietary nature or
for any other reason, and it will return such submission to the
originator without considering them in the development of final
regulations. In the interest of accuracy and completeness, the
Department requires comments in written form.
All public comments on these regulations will be a matter of public
record. Copies of the public record concerning these regulations will
be made available, not sooner than October 10, 2001 and may be obtained
from OFAC's website (http://www.treas.gov/ofac). If that service is
unavailable, written requests for copies may be sent to: Office of
Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Ave., NW Washington, DC 20220, Attn: Merete Evans.
Because no notice of proposed rulemaking is required for this rule,
the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.
Paperwork Reduction Act
The collections of information related to the Regulations are
contained in 31 CFR part 501 (the ``Reporting and Procedures
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44
U.S.C. 3507), those collections of information have been previously
approved by the Office of Management and Budget (``OMB'') under control
number 1505-0164. An agency may not conduct or sponsor, and a person is
not required to respond to, a collection of information unless the
collection of information displays a valid control number.
List of Subjects
31 CFR Part 515
Administrative practice and procedure, Agricultural commodities,
Banks, Banking, Cuba, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Loans, Medical devices, Medicine, Penalties,
Reporting and recordkeeping requirements, Services, Specially
designated nationals, Terrorism, Transportation.
31 CFR Part 538
Administrative practice and procedure, Agricultural commodities,
Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Loans, Medical devices, Medicine, Penalties,
Reporting and recordkeeping requirements, Services, Specially
designated nationals, Sudan, Terrorism, Transportation.
31 CFR Part 550
Administrative practice and procedure, Agricultural commodities,
Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Libya, Loans, Medical devices, Medicine,
Penalties, Reporting and recordkeeping requirements, Services,
Specially designated nationals, Terrorism, Transportation.
31 CFR Part 560
Administrative practice and procedure, Agricultural commodities,
Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Iran, Loans, Medical devices, Medicine,
Penalties, Reporting and recordkeeping requirements, Services,
Specially designated nationals, Terrorism, Transportation.
For the reasons set forth in the preamble, 31 CFR chapter V, parts
515, 538, 550, and 560 are amended as follows:
PART 515--CUBAN ASSETS CONTROL REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 515 to read as
follows:
Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 31
U.S.C. 321(b); 50 U.S.C. App. 1-44; Pub. L. 101-410, 104 Stat. 890
(28 U.S.C. 2461 note); Pub. L. 106-387, 114 Stat. 1549; E.O. 9193, 7
FR 5205, 3 CFR, 1938-1943 Comp., p. 1147; E.O. 9989, 13 FR 4891, 3
CFR, 1943-1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3 CFR, 1959-
1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p.
614.
Subpart B--Prohibitions
2. Amend Sec. 515.207 by adding a note to the end of the section to
read as follows:
Sec. 515.207 Entry of vessels engaged in trade with Cuba.
* * * * *
Note to Sec. 515.207: For the waiver of the prohibitions
contained in this section for certain vessels engaged in licensed or
exempt trade with Cuba, see Sec. 515.550.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
3. Revise the heading and paragraphs (a) and (e) and remove
paragraph (f) of Sec. 515.533 to read as follow:
Sec. 515.533 Transactions incident to exportations from the United
States and reexportations of U.S.-origin items to Cuba.
(a) All transactions ordinarily incident to the exportation of
goods, wares, and merchandise from the United States, or the
reexportation of U.S.-origin goods, wares, and merchandise from a third
country, to any person within Cuba are hereby authorized, provided the
following terms and conditions are complied with:
(1) The exportation or reexportation is licensed or otherwise
authorized by the Department of Commerce under the provisions of the
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
2420) (see the Export Administration Regulations, 15 CFR 730-774); and
(2) Only the following payment or financing terms may be used:
(i) Payment of cash in advance;
(ii) For authorized sales of agricultural items, financing by a
banking institution located in a third country provided the banking
institution is not a designated national, United States citizen, United
States permanent resident alien, or an entity organized under the laws
of the United States or any jurisdiction within the United States
(including foreign branches). Such financing may be confirmed or
advised by a United States banking institution; or
(iii) For all other authorized sales, financing by a banking
institution located in a third country provided the banking institution
is not a designated national or a person subject to the jurisdiction of
the United States. Such financing may be confirmed or advised by a
United States banking institution.
* * * * *
(e) Specific licenses may be issued on a case-by-case basis
authorizing the travel-related transactions set forth in
Sec. 515.560(c) and other transactions that are directly incident to
the marketing, sales negotiation, accompanied delivery, or servicing of
exports or reexports that are consistent with the export or reexport
licensing policy of the Department of Commerce.
* * * * *
4. Revise the heading of Sec. 515.559 and the Note to Sec. 515.559
to read as follows:
Sec. 515.559 Certain transactions by U.S.-owned or controlled foreign
firms with Cuba.
* * * * *
Note to Sec. 515.559: For reexportation of U.S.-origin goods,
wares, or merchandise by U.S.-owned or controlled foreign firms, see
Sec. 515.533. Transactions by U.S.-owned or controlled foreign firms
directly incident to the exportation of information or informational
materials or the donation of
[[Page 36688]]
food to nongovernmental entities or individuals in Cuba are exempt
from the prohibitions of this part. See Sec. 515.206. For the waiver
of the prohibitions contained in Sec. 515.207 with respect to
vessels transporting shipments of goods, wares, or merchandise
pursuant to this section, see Sec. 515.550.
5. Revise paragraph (b) of Sec. 515.560 to read as follows:
Sec. 515.560 Travel-related transactions to, from, and within Cuba by
persons subject to the jurisdiction of the United States.
* * * * *
(b) Effective October 28, 2000, no specific licenses will be issued
authorizing the travel-related transactions in paragraph (c) of this
section in connection with activities other than those referenced in
paragraph (a) of this section.
* * * * *
PART 538--SUDANESE SANCTIONS REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 538 to read as
follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2339B,
2332d; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 106-387, 114 Stat.
1549; E.O. 13067, 62 FR 59989; 3 CFR, 1997 Comp., p. 230.
Subpart B--Prohibitions
2. Revise Sec. 538.205 to read as follows:
Sec. 538.205 Prohibited exportation and reexportation of goods,
technology, or services to Sudan.
Except as otherwise authorized, the exportation or reexportation,
directly or indirectly, to Sudan of any goods, technology (including
technical data, software, or other information) or services from the
United States or by a United States person, wherever located, or
requiring the issuance of a license by a Federal agency, is prohibited.
3. Amend Sec. 538.211 to redesignate paragraphs (b) through (e) as
paragraphs (c) through (f) and to add a new paragraph (b) to read as
follows:
Sec. 538.211 Exempt transactions.
* * * * *
(b) Humanitarian donations. The prohibitions of this part do not
apply to donations by United States persons of articles, such as food,
clothing, and medicine, intended to be used to relieve human suffering.
* * * * *
Subpart D--Interpretations
4. Amend Sec. 538.405 by revising paragraph (b) to read as follows:
Sec. 538.405 Transactions incidental to a licensed transaction
authorized.
* * * * *
(b) Provision of any transportation services to or from Sudan not
explicitly authorized in or pursuant to this part other than loading,
transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
5. Revise Sec. 538.523 to read as follows:
Sec. 538.523 Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.
(a) One-year license requirement. The exportation or reexportation
of agricultural commodities (including bulk agricultural commodities
listed in appendix A to this part 538), medicine, or medical devices to
the Government of Sudan, any entity in Sudan, individuals in Sudan, or
persons in third countries purchasing specifically for resale to any of
the foregoing, shall only be made pursuant to a one-year license issued
by the U.S. Department of the Treasury, Office of Foreign Assets
Control, for contracts entered into during the one-year period of the
license and shipped within the 12-month period beginning on the date of
the signing of the contract. No license will be granted for the
exportation or reexportation of agricultural commodities, medicine, or
medical equipment to any entity or individual in Sudan promoting
international terrorism. Executory contracts entered into pursuant to
paragraph (b)(2) of this section prior to the issuance of the one-year
license described in this paragraph shall be deemed to have been signed
on the date of issuance of that one-year license (and, therefore, the
exporter is authorized to make shipments under that contract within the
12-month period beginning on the date of issuance of the one-year
license).
(b) General license for arrangement of exportation or reexportation
of covered products.
(1) The making of shipping arrangements, cargo inspection,
obtaining of insurance, and arrangement of financing (consistent with
Sec. 538.525) for the exportation or reexportation of agricultural
commodities, medicine, or medical devices to the Government of Sudan,
entities in Sudan, individuals in Sudan, or persons in third countries
purchasing specifically for resale to any of the foregoing, is
authorized.
(2) If desired, entry into executory contracts (including executory
pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for
the exportation or reexportation of agricultural commodities, medicine,
and medical devices to the Government of Sudan, entities in Sudan,
individuals in Sudan, or persons in third countries purchasing
specifically for resale to any of the foregoing, is authorized,
provided that performance of an executory contract is expressly made
contingent upon the prior issuance of the one-year license described in
paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter
must provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a business
entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC may
reach a responsible point of contact, the applicant should also include
the name of the individual(s) responsible for the application and
related commercial transactions along with their telephone and fax
numbers and, if available, email addresses).
(3) The names, mailing addresses, and if available, fax and
telephone numbers of all parties with an interest in the transaction.
If the goods are being exported or reexported to a purchasing agent in
Sudan, the exporter must identify the agent's principals at the
wholesale level for whom the purchase is being made. If the goods are
being exported or reexported to an individual, the exporter must
identify any organizations or entities with which the individual is
affiliated that have an interest in the transaction.
(4) A description of all items to be exported or reexported
pursuant to the requested one-year license, including a statement that
the item is classified as EAR 99, and, if necessary, documentation
sufficient to verify that the items to be exported or reexported are
classified as EAR 99 and do not fall within any of the limitations
contained in paragraph (d) of this section.
(5) An Official Commodity Classification of EAR 99 issued by the
Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 is required to be submitted to
OFAC with the request for a license authorizing the exportation or
reexportation of all fertilizers, live horses, western red cedar, and
medical devices other than basic medical supplies, such as
[[Page 36689]]
syringes, bandages, gauze and similar items, that are specifically
listed on BXA's website, www.bxa.doc.gov/ Regulations/Trade Sanctions
ReformExport EnhancementAct.html. Medical supplies that are
specifically listed on BXA's website do not require an Official
Commodity Classification of EAR 99 from BXA. BXA will also provide a
list on its website of medicines that are ineligible for a one-year
license under these procedures. If an exporter is uncertain whether the
medicine to be exported is eligible, they should seek an Official
Commodity Classification of EAR 99 from BXA and submit a copy to OFAC.
See, 15 CFR 745.3 for instructions for obtaining Official Commodity
Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section relieves the exporter from compliance
with the export license application requirements of another Federal
agency.
(2) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section authorizes the exportation or
reexportation of any agricultural commodity, medicine, or medical
device controlled on the United States Munitions List established under
section 38 of the Arms Export Control Act (22 U.S.C. 2778); controlled
on any control list established under the Export Administration Act of
1979 or any successor statute (50 U.S.C. App. 2401 et seq.; or used to
facilitate the development or production of a chemical or biological
weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects prohibitions on the sale or
supply of U.S. technology or software used to manufacture agricultural
commodities, medicine, or medical devices, such as technology to design
or produce biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects U.S. nonproliferation export
controls, including end-user and end-use controls maintained under the
Enhanced Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or to any other
activity prohibited by this chapter that is not otherwise authorized in
this part.
(e) Covered items. For the purposes of this part, agricultural
commodities, medicine, and medical devices are defined below.
(1) Agricultural commodities. For the purposes of this section,
agricultural commodities are:
(i) Products that are not listed on the Commerce Control List in
the Export Administration Regulations, 15 CFR part 774, supplement no.
1, and that fall within the term ``agricultural commodity'' as defined
in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602);
and
(ii) Products not listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Sudan as:
(A) Food for humans (including raw, processed, and packaged foods;
live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized eggs,
embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term medicine
has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not
include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(3) Medical device. For the purposes of this section, the term
medical device has the meaning given the term ``device'' in section 201
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does
not include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001 authorizing the
performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect
until the expiration date specified in the license or July 26, 2002,
whichever comes first. However, after July 26, 2001, new contracts for
the exportation of agricultural commodities, medicine, or medical
devices may be entered into only pursuant to the terms of, and as
authorized by, this part.
(2) Specific licenses issued prior to July 26, 2001 authorizing the
sale and exportation or reexportation of bulk agricultural commodities
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31
CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001
pursuant to the license. As of July 26, 2001, new contracts for the
exportation of bulk agricultural commodities may be entered into only
pursuant to the terms of, and as authorized by, this part.
Sec. 538.524 [removed and reserved]
6. Remove and reserve Sec. 538.524.
7. Amend Sec. 538.525 to revise the heading and paragraph (d) and
to add a new paragraph (e) to read as follows:
Sec. 538.525 Payment for and financing of commercial sales of
agricultural commodities, medicine, and medical equipment.
* * * * *
(d) Transfers through the U.S. financial system. Before a United
States financial institution initiates a payment on behalf of any
customer, or credits a transfer to the account on its books of the
ultimate beneficiary, the United States financial institution must
determine that the underlying transaction is not prohibited by this
part. Any payment relating to a transaction authorized in or pursuant
to Sec. 538.523 or Sec. 538.526 that is routed through the U.S.
financial system must reference the relevant Office of Foreign Assets
Control license authorizing the payment to avoid the blocking or
rejection of the transfer.
(e) Notwithstanding any other provision of this part, no commercial
exportation to Sudan may be made with United States Government
assistance, including United States foreign assistance, United States
export assistance, and any United States credit or guarantees absent a
Presidential waiver.
8. Amend Sec. 538.526 to revise the heading and paragraphs (a), (b)
introductory text, (b)(1) and (b)(2) to read as follows:
Sec. 538.526 Brokering sales of agricultural commodities, medicine,
and medical devices.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to provide brokerage services on behalf
of U.S. persons for the sale and exportation or reexportation by United
States persons of agricultural commodities, medicine, and medical
devices, provided that the sale and exportation or reexportation is
authorized by a one-year license issued pursuant to Sec. 538.523.
(b) Specific licensing for brokering sales by non-U.S. persons of
bulk agricultural commodities. Specific licenses may be issued on a
case-by-case
[[Page 36690]]
basis to permit United States persons to provide brokerage services on
behalf of non-United States, non-Sudanese persons for the sale and
exportation or reexportation of bulk agricultural commodities to the
Government of Sudan, entities in Sudan or individuals in Sudan.
Specific licenses issued pursuant to this section will authorize the
brokering only of sales that:
(1) Are limited to the bulk agricultural commodities listed in
appendix A to this part 538;
(2) Are to purchasers permitted pursuant to Sec. 538.523;
Note to paragraph (b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of
the information described in Sec. 538.523(c).
* * * * *
PART 550--LIBYAN SANCTIONS REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 550 to read as
follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 287c,
2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); Pub. L. 106-387, 114 Stat. 1549; E.O. 12543, 51
FR 875; 3 CFR, 1986 Comp., p. 181; E.O. 12544, 51 FR 1235, 3 CFR,
1986 Comp., p. 183; E.O. 12801, 57 FR 14319 3 CFR, 1992 Comp., p.
294.
Subpart C--Definitions
2. Revise Sec. 550.206 to read as follows:
Sec. 550.306 Person.
The term person means an individual or entity.
3. Revise Sec. 550.308 to read as follows:
Sec. 550.308 United States person.
The term United States person, or as abbreviated, U.S. person,
means any United States citizen, permanent resident alien, juridical
person authorized under the laws of the United States (including
foreign branches), or any person in the United States.
4. Revise Sec. 550.318 to read as follows:
Sec. 550.318 Entity.
The term entity means a partnership, association, trust, joint
venture, corporation, or other organization.
Subpart D--Interpretations
5. Amend Sec. 550.405 to revise paragraph (b) to read as follows:
Sec. 550.405 Transactions incidental to a licensed transaction
authorized.
* * * * *
(b) Provision of any transportation services to or from Libya not
explicitly authorized in or pursuant to this part other than loading,
transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
6. Revise Sec. 550.569 to read as follows:
Sec. 550.569 Commercial sales and exportation of agricultural
commodities, medicine, and medical devices.
(a) One-year license requirement. The exportation of agricultural
commodities (including bulk agricultural commodities listed in appendix
A to this part 550), medicine, or medical devices to the Government of
Libya, any entity in Libya, individuals in Libya, or persons in third
countries purchasing specifically for resale to any of the foregoing,
shall only be made pursuant to a one-year license issued by the United
States Department of the Treasury, Office of Foreign Assets Control,
for contracts entered into during the one-year period of the license
and shipped within the 12-month period beginning on the date of the
signing of the contract. No license will be granted for the exportation
of agricultural commodities, medicine, or medical equipment to any
entity or individual in Libya promoting international terrorism.
Executory contracts entered into pursuant to paragraph (b)(2) of this
section prior to the issuance of the one-year license described in this
paragraph shall be deemed to have been signed on the date of issuance
of that one-year license (and, therefore, the exporter is authorized to
make shipments under that contract within the 12-month period beginning
on the date of issuance of the one-year license).
(b) General license for arrangement of exportation of covered
products.
(1) The making of shipping arrangements, cargo inspection,
obtaining of insurance, and arrangement of financing (consistent with
Sec. 550.571) for the exportation of agricultural commodities,
medicine, and medical devices to the Government of Libya, entities in
Libya, individuals in Libya, or persons in third countries purchasing
specifically for resale to any of the foregoing, is authorized.
(2) If desired, entry into executory contracts (including executory
pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for
the exportation of agricultural commodities, medicine, and medical
devices to the Government of Libya, entities in Libya, individuals in
Libya, or persons in third countries purchasing specifically for resale
to any of the foregoing, is authorized, provided that performance of an
executory contract is expressly made contingent upon the prior issuance
of the one-year license described in paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter
must provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a business
entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC may
reach a responsible point of contact, the applicant should also include
the name of the individual(s) responsible for the application and
related commercial transactions along with their telephone and fax
numbers and, if available, email addresses).
(3) The names and addresses and, if available, fax and phone
numbers of all parties with an interest in the transaction. If the
goods are being exported to a purchasing agent in Libya, the exporter
must identify the agent's principals at the wholesale level for whom
the purchase is being made. If the goods are being exported to an
individual, the exporter must identify any organizations or entities
with which the individual is affiliated that have an interest in the
transaction.
(4) A description of all items to be exported pursuant to the
requested one-year license, including a statement that the item is
classified as EAR 99, and, if necessary, documentation sufficient to
verify that the items to be exported are classified as EAR 99 and do
not fall within any of the limitations contained in paragraph (d) of
this section.
(5) An Official Commodity Classification of EAR 99 issued by the
Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 is required to be submitted to
OFAC with the request for a license authorizing the exportation or
reexportation of all fertilizers, live horses, western red cedar, and
medical devices other than basic medical supplies, such as syringes,
bandages, gauze and similar items, that are specifically listed on
BXA's website, www.bxa.doc.gov/ Regulations/TradeSanctionsReform
ExportEnhancementAct.html. Medical supplies that are specifically
listed on BXA's website do not require an Official
[[Page 36691]]
Commodity Classification of EAR 99 from BXA. BXA will also provide a
list on its website of medicines that are ineligible for a one-year
license under these procedures. If an exporter is uncertain whether the
medicine to be exported is eligible, they should seek an Official
Commodity Classification of EAR 99 from BXA and submit a copy to OFAC.
See, 15 CFR 745.3 for instructions for obtaining Official Commodity
Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section relieves the exporter from compliance
with the export license application requirements of another Federal
agency.
(2) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section authorizes the exportation or
reexportation of any agricultural commodity, medicine, or medical
device controlled on the United States Munitions List established under
section 38 of the Arms Export Control Act (22 U.S.C. 2778); controlled
on any control list established under the Export Administration Act of
1979 or any successor statute (50 U.S.C. App. 2401 et seq.); or used to
facilitate the development or production of a chemical or biological
weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects prohibitions on the sale or
supply of U.S. technology or software used to manufacture agricultural
commodities, medicine, or medical devices, such as technology to design
or produce biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects U.S. nonproliferation export
controls, including end-user and end-use controls maintained under the
Enhanced Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or any other
activity prohibited by this chapter not otherwise authorized in this
part.
(e) Covered items. For the purposes of this part, agricultural
commodities, medicine, and medical devices are defined below.
(1) Agricultural commodities. For the purposes of this section,
agricultural commodities are:
(i) Products that are not listed on the Commerce Control List in
the Export Administration Regulations, 15 CFR part 774, supplement no.
1, and that fall within the term ``agricultural commodity'' as defined
in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602);
and
(ii) Products not listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Libya as:
(A) Food for humans (including raw, processed, and packaged foods;
live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized eggs,
embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term medicine
has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not
include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(3) Medical device. For the purposes of this section, the term
medical device has the meaning given the term ``device'' in section 201
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does
not include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001 authorizing the
performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect
until the expiration date specified in the license or July 26, 2002,
whichever comes first. However, after July 26, 2001, new contracts for
the exportation of agricultural commodities, medicine, or medical
devices may be entered into only pursuant to the terms of, and as
authorized by, this part.
(2) Specific licenses issued prior to July 26, 2001 authorizing the
sale and exportation or reexportation of bulk agricultural commodities
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31
CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001
pursuant to the license. As of July 26, 2001, new contracts for the
exportation of bulk agricultural commodities may be entered into only
pursuant to the terms of, and as authorized by, this part.
7. Remove and reserve Sec. 550.570.
Sec. 550.570 [Removed and reserved]
8. Amend Sec. 550.571 to revise the heading and paragraph (d) and
to add a new paragraph (e) to read as follows:
Sec. 550.571 Payment for and financing of exports of agricultural
commodities, medicine, and medical equipment.
* * * * *
(d) Transfers through the U.S. financial system. Before a United
States financial institution initiates a payment on behalf of any
customer, or credits a transfer to the account on its books of the
ultimate beneficiary, the United States financial institution must
determine that the underlying transaction is not prohibited by this
part. Any payment relating to a transaction authorized in or pursuant
to Sec. 550.569 or Sec. 550.572 that is routed through the U.S.
financial system must reference the relevant Office of Foreign Assets
Control license authorizing the payment to avoid the blocking or
rejection of the transfer.
(e) Notwithstanding any other provision of this part, no commercial
exportation to Libya may be made with United States Government
assistance, including United States foreign assistance, United States
export assistance, and any United States credit or guarantees absent a
Presidential waiver.
9. Amend Sec. 550.572 to revise the heading and paragraphs (a), (b)
introductory text, (b)(1) and (b)(2) to read as follows:
Sec. 550.572 Brokering sales of agricultural commodities, medicine,
and medical devices.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to provide brokerage services on behalf
of U.S. persons for the sale and exportation or reexportation by United
States persons of agricultural commodities, medicine, and medical
devices, provided that the sale and exportation or reexportation is
authorized by a one-year license issued pursuant to Sec. 550.569.
(b) Specific licensing for brokering sales by non-U.S. persons of
bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage
services on behalf of non-United States, non-Libyan persons for the
sale and exportation or reexportation of bulk agricultural commodities
to the Government of Libya, entities in Libya or individuals in
[[Page 36692]]
Libya. Specific licenses issued pursuant to this section will authorize
the brokering only of sales that:
(1) Are limited to the bulk agricultural commodities listed in
appendix A to this part 550;
(2) Are to purchasers permitted pursuant to Sec. 550.569;
Note to paragraph (b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of
the information described in Sec. 550.569(c).
* * * * *
10. Revise Sec. 550.573 to read as follows:
Sec. 550.573 Travel transactions in connection with the exportation of
agricultural commodities, medicine, and medical devices.
Travel transactions to, from, and within Libya for the sole purpose
of engaging in transactions authorized by Sec. 550.569 are authorized.
Travel transactions related to installation or servicing of medical
equipment sold pursuant to Sec. 550.569 must be authorized by specific
license. See Sec. 501.801(b) of this chapter for specific licensing
procedures.
Note to Sec. 550.573: U.S. passports must be validated by the
U.S. Department of State for travel to Libya.
PART 560--IRAN TRANSACTION REGULATIONS
Authority
1. Revise the authority citation for part 560 to read as follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C.
2349aa-9; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L.
101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 106-387, 114
Stat. 1549; E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp., p. 256; E.O.
12957, 60 FR 14615, 3 CFR, 1995 Comp., p. 332; E.O. 12959, 60 FR
24757, 3 CRF, 1995 Comp., p. 356; E.O. 13059, 62 FR 44531, 3 CFR,
1997 Comp., p. 217.
Subpart D--Interpretations
2. Amend Sec. 560.405 to revise paragraph (b) to read as follows:
Sec. 560.405 Transactions incidental to a licensed transaction
authorized.
* * * * *
(b) Provision of any transportation services to or from Iran not
explicitly authorized in or pursuant to this part other than loading,
transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations and Statements of Licensing
Policy
3. Amend Sec. 560.520 to revise the heading to read as follows:
Sec. 560.520 Exportation of agricultural commodities on contracts
entered into prior to May 7, 1995.
* * * * *
4. Revise Sec. 560.530 to read as follows:
Sec. 560.530 Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.
(a) One-year license requirement. The exportation or reexportation
of agricultural commodities (including bulk agricultural commodities
listed in appendix B to this part 560), medicine, or medical devices to
the Government of Iran, any entity in Iran, individuals in Iran, or
persons in third countries purchasing specifically for resale to any of
the foregoing, shall only be made pursuant to a one-year license issued
by the United States Department of the Treasury, Office of Foreign
Assets Control, for contracts entered into during the one-year period
of the license and shipped within the 12-month period beginning on the
date of the signing of the contract. No license will be granted for the
exportation or reexportation of agricultural commodities, medicine, or
medical equipment to any entity or individual in Iran promoting
international terrorism. Executory contracts entered into pursuant to
paragraph (b)(2) of this section prior to the issuance of the one-year
license described in this paragraph shall be deemed to have been signed
on the date of issuance of that one-year license (and, therefore, the
exporter is authorized to make shipments under that contract within the
12-month period beginning on the date of issuance of the one-year
license).
(b) General license for arrangement of exportation and
reexportation of covered products.
(1) The making of shipping arrangements, cargo inspections,
obtaining of insurance, and arrangement of financing (consistent with
Sec. 560.532) for the exportation or reexportation of agricultural
commodities, medicine, and medical devices to the Government of Iran,
entities in Iran, individuals in Iran, or persons in third countries
purchasing specifically for resale to any of the foregoing, is
authorized.
(2) If desired, entry into executory contracts (including executory
pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for
the exportation or reexportation of agricultural commodities, medicine,
and medical devices to the Government of Iran, entities in Iran,
individuals in Iran, or persons in third countries purchasing
specifically for resale to any of the foregoing, is authorized,
provided that performance of an executory contract is expressly made
contingent upon the prior issuance of the one-year license described in
paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter
must provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a business
entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC may
reach a responsible point of contact, the applicant should also include
the name of the individual(s) responsible for the application and
related commercial transactions along with their telephone and fax
numbers and, if available, email addresses).
(3) The names, mailing addresses, and, if available, fax and
telephone numbers of all parties with an interest in the transaction.
If the goods are being exported or reexported to a purchasing agent in
Iran, the exporter must identify the agent's principals at the
wholesale level for whom the purchase is being made. If the goods are
being exported or reexported to an individual, the exporter must
identify any organizations or entities with which the individual is
affiliated that have an interest in the transaction.
(4) A description of all items to be exported or reexported
pursuant to the requested one-year license, including a statement that
the item is classified as EAR 99, and, if necessary, documentation
sufficient to verify that the items to be exported or reexported are
classified as EAR 99 and do not fall within any of the limitations
contained in paragraph (d) of this section.
(5) An Official Commodity Classification of EAR 99 issued by the
Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 is required to be submitted to
OFAC with the request for a license authorizing the exportation or
reexportation of all fertilizers, live horses, western red cedar, and
medical devices other than basic medical supplies, such as syringes,
bandages, gauze and similar items, that are specifically listed on
BXA's website, www.bxa.doc.gov/Regulations/Trade Sanctions
[[Page 36693]]
ReformExport EnhancementAct.html. Medical supplies that are
specifically listed on BXA's website do not require an Official
Commodity Classification of EAR 99 from BXA. BXA will also provide a
list on its website of medicines that are ineligible for a one-year
license under these procedures. If an exporter is uncertain whether the
medicine to be exported is eligible, they should seek an Official
Commodity Classification of EAR 99 from BXA and submit a copy to OFAC.
See, 15 CFR 745.3 for instructions for obtaining Official Commodity
Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section relieves the exporter from compliance
with the export license application requirements of another Federal
agency.
(2) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section authorizes the exportation or
reexportation of any agricultural commodity, medicine, or medical
device controlled on the United States Munitions List established under
section 38 of the Arms Export Control Act (22 U.S.C. 2778); controlled
on any control list established under the Export Administration Act of
1979 or any successor statute (50 U.S.C. App. 2401 et seq.); or used to
facilitate the development or production of a chemical or biological
weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects prohibitions on the sale or
supply of U.S. technology or software used to manufacture agricultural
commodities, medicine, or medical devices, such as technology to design
or produce biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant to
paragraph (a) of this section affects U.S. nonproliferation export
controls, including end-user and end-use controls maintained under the
Enhanced Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or any other
activity prohibited by this chapter not otherwise authorized in this
part.
(e) Covered items. For the purposes of this part, agricultural
commodities, medicine, and medical devices are defined below.
(1) Agricultural commodities. For the purposes of this section,
agricultural commodities are:
(i) Products not listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1, and that
fall within the term ``agricultural commodity'' as defined in section
102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and
(ii) Products not listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Iran as:
(A) Food for humans (including raw, processed, and packaged foods;
live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized eggs,
embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term medicine
has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not
include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(3) Medical device. For the purposes of this section, the term
medical device has the meaning given the term ``device'' in section 201
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does
not include any item listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1
(excluding items classified as EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001 authorizing the
performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect
until the expiration date specified in the license or July 26, 2002,
whichever comes first. However, after July 26, 2001, new contracts for
the exportation of agricultural commodities, medicine, or medical
devices may be entered into only pursuant to the terms of, and as
authorized by, this new part.
(2) Specific licenses issued prior to July 26, 2001 authorizing the
sale and exportation or reexportation of bulk agricultural commodities
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31
CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001
pursuant to the license. As of July 26, 2001, new contracts for the
exportation of bulk agricultural commodities may be entered into only
pursuant to the terms of, and as authorized by, this part.
Sec. 560.531 [Removed and reserved]
5. Remove and reserve Sec. 560.531.
6. Amend Sec. 560.532 to revise the heading and paragraph (d) and
to add a new paragraph (e) to read as follows:
Sec. 560.532 Payment for and financing of exports and reexports of
commercial commodities, medicine, and medical devices.
* * * * *
(d) Transfers through the U.S. financial system. Any payment
relating to a transaction authorized in or pursuant to Sec. 560.530 or
Sec. 560.533 that is routed through the U.S. financial system must
reference the relevant Office of Foreign Assets Control license
authorizing the payment to avoid the rejection of the transfer. See
Sec. 560.516(b).
(e) Notwithstanding any other provision of this part, no commercial
exportation to Iran may be made with United States Government
assistance, including United States foreign assistance, United States
export assistance, and any United States credit or guarantees absent a
Presidential waiver.
7. Amend Sec. 560.533 to revise the heading and paragraphs (a), (b)
introductory text, (b)(1), and (b)(2) to read as follows:
Sec. 560.533 Brokering sales of agricultural commodities, medicine,
and medical devices.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to provide brokerage services on behalf
of U.S. persons for the sale and exportation or reexportation by United
States persons of agricultural commodities, medicine, and medical
devices, provided that the sale and exportation or reexportation is
authorized by a one-year license issued pursuant to Sec. 560.530.
(b) Specific licensing for brokering sales by non-U.S. persons of
bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage
services on behalf of non-United States, non-Iranian persons for the
sale and exportation or reexportation of bulk agricultural commodities
to the Government of Iran, entities in Iran or individuals in Iran.
Specific licenses issued pursuant to this section will authorize the
brokering only of sales that:
[[Page 36694]]
(1) Are limited to the bulk agricultural commodities listed in
appendix B to this part 560;
(2) Are to purchasers permitted pursuant to Sec. 560.530;
* * * * *
Note to Sec. 560.533(b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of
the information described in Sec. 560.530(c).
Dated: June 6, 2001.
Loren L. Dohm,
Acting Director, Office of Foreign Assets Control.
Approved: June 14, 2001.
James F. Sloan,
Acting Under Secretary (Enforcement), Department of the Treasury.
[FR Doc. 01-17466 Filed 7-10-01; 11:02 am]
BILLING CODE 4810-25-P